The Goddess of Liberty, perched atop a granite spire in the heart of Allentown, has a commanding view of the scenario that launched a six-city, statewide scramble.

Around her there are skyward-reaching construction cranes, swarms of workers in hard hats and brand-new glass-and-brick building facades. But the goddess - actually the crowning statue of a 114-year-old military monument - had no say-so in picking the winner of the scramble.

That job fell to the administration of Gov. Tom Corbett. On Monday, Corbett announced that two cities chosen from six competitors would get special economic designations that, while not packing the full punch of the one that created the Allentown building boom, would nonetheless be a huge help.

Lancaster and Bethlehem had cause to celebrate. Reading, Scranton, Erie and York would have to wait.

In Reading, disappointment reigned.

Authority member Elaine McDevitt said Reading had been a long shot. Lancaster had an inside track because officials there helped generate the City Revitalization and Improvement Zone (CRIZ) law, and program guidelines were issued only a month before applications were due.

"We hardly had any time to prepare for it," McDevitt said.

But conversations with officials and business people in Allentown over a period of weeks in December made it clear that Reading had missed out, for the time being, on a very lucrative concept.

Alan Jennings, a board member of the authority that is managing the resurgence of Allentown, said "This has been an absolute godsend for the residents of Allentown."

The half-a-billion boom

A new hockey arena is well under way. Office buildings and a hotel are being built or are planned. Thousands of construction jobs have been secured, and thousands of permanent in-city jobs are predicted.

All told, more than $500 million in redevelopment is planned or is already occurring.

Businessman Santo Napoli, an Exeter High School graduate who owns The Archive clothing and footwear stores in Allentown and Reading, stood just inside the display window of his Allentown store and pointed across Hamilton Street at the work-in-progress hulk of the former Schoen's Furniture Store.

"It is a very difficult property," he said. "No one touched it for 15 years. Now it is going to have glass and a lot of offices."

What Allentown got - and what Reading and the other five cities in the CRIZ competition had subsequently hoped to get - was state government's blessing to steer large sums of taxes away from their traditional destinations.

Instead of going to state or local coffers, certain taxes generated in the specified zone would pay off bonds floated for development.

Ed Pawlowski, mayor of Allentown and a Democrat running for governor, said that back in 2009 his inner city was, like Reading's, being hollowed out by urban decay.

"We needed to do something dramatic," Pawlowski said.

Area leaders were looking for a way to host a minor league hockey team in the city. Conventional financing for a new hockey arena was not available, Pawlowski said.

"We weren't going to wait around for the state to come up with a program," he said. "We decided to create a program ourselves."

State Sen. Patrick M. Browne, a Republican who represents Allentown and is a former accountant, is credited as being the mastermind behind the Allentown-only state legislation that gave the city a Neighborhood Improvement Zone, or NIZ.

It sanctioned the redirecting of taxes to paying off developers' bonds, even though it meant a significant loss of state tax revenue.

Now construction is under way on a 10,000-seat arena that will be home to the Lehigh Valley Phantoms hockey team, the AHL affiliate of the NHL's Philadelphia Flyers. Attached to the arena will be an 180,000-square-foot office and retail building - already fully leased - as well as a new hotel with 180 rooms.

Across the street is a 300,000-square-foot building with space rented by major corporations including Air Products & Chemicals and National Penn Bancshares, which is relocating its headquarters from Berks County.

City leaders from around the state saw what was going on in Allentown.

In Lancaster, they took particular notice.

NIZ begets CRIZ

"If it weren't for us, there wouldn't be a CRIZ," Lancaster Mayor J. Richard "Rick" Gray said Tuesday.

The concept for CRIZ - state government's sequel to NIZ - was born after a Lancaster meeting held a year or two ago that involved many local officials, according to Gray.

The city's convention center needed new fixtures and furniture. The cost would be in the millions, and financing was a problem.

Gray, a Democrat, said that after the meeting he approached state Sen. Lloyd K. Smucker, a Lancaster County Republican, and said, "Do you know what they are doing in Allentown?"

Smucker, he said, looked into the germination of Allentown's new development and the idea for a follow-up law to help other cities began to evolve.

But CRIZ was a different animal.

NIZ had allowed for a wholesale redirection of taxes in Allentown's zone. The CRIZ law, as it was passed, allowed only new and additional tax revenue - generated by companies moving in from out of state or newly created jobs - to be used to pay developers' bonds.

Lancaster had an advantage in the CRIZ competition right from the start, according to Gray.

"We knew the act forward and backwards. We knew what had to be done," Gray said. "There was no question we had a step up."

On the morning after the announcement of Lancaster's CRIZ win, Gray said he had already seen unrealistic exuberance.

"A lot of people think all of a sudden the city is going to get $100 million to distribute and it is not that easy," he said.

In Bethlehem, Mayor John Callahan was excited.

His city's CRIZ application had outlined 11 projects that would entail $350 million to $400 million of new investment and produce a total of 7,100 construction and permanent jobs.

"I think the strength of our application was that we had several shovel-ready sites whose ownership was already in the hands of reputable developers," he said. "Those projects were real and they were going to happen if this CRIZ was given to Bethlehem."

The next round

The CRIZ law calls for two more cities to get designations in 2016.

Reading's CRIZ authority will stay together. Peter Rye, the chairman, said it needs to put more effort into refining its proposal.

State Sen. Judy Schwank, a Ruscombmanor Township Democrat, said she was preparing to propose a new law that will speed up and expand the CRIZ program, so Reading might not have to wait so long.

She said she was told Corbett would be receptive to moving the program up.

In the next round, Callahan suggested Reading accent the positive.

"I understand that Reading felt deserving in that they needed it, and I think they do," he said. "But I have always thought the better argument was not that 'We need it more than anyone else' but 'We need it more because look what will happen if we get the CRIZ.' "

Gray, the Lancaster mayor, said, "I wouldn't be too discouraged if I was Reading. This gives you a chance to sit back and work on a plan."